OECD = FAO expects global agricultural production growth to slow

2013 june 6, Beijing-A new report released by the OECD and FAO points out that global agricultural production is expected to grow at an average annual rate of 1.5 per cent over the next decade, compared with an annual growth rate of 2.1 per cent from 2003 to 2012.

Restricted expansion of agricultural land, increased production costs, increased resource constraints, and increased environmental pressure are the main reasons behind this trend. But the report also suggests that the supply of agricultural products should keep pace with global demand.

OECD-FAO Agricultural Outlook 2013-2022 it is expected that the medium-term prices of crops and livestock products will remain above the historical average due to a combination of slower production growth and stronger demand (including demand for biofuels).

The report points out that agriculture has increasingly transformed into a market-oriented field, which is the opposite of the policy-driven situation in the past. At the same time, given the increasing food demand in developing countries, the potential for expansion of production and the comparative advantage in many global markets, This brings important investment opportunities and economic benefits to developing countries.

However, production shortfalls, price volatility and trade disruptions continue to threaten global food security. The OECD-FAO Agriculture Outlook warns: "As long as food stocks are low in major producing and consuming countries, the risk of price volatility will increase. As a result of low food stocks, coupled with widespread droughts, such as the one in 2012, world food prices could rise by 15-40 per cent."

with the world's 1/5 population, high income growth and a rapidly expanding agri-food sector, China will have a significant impact on global markets and receive special attention in the Outlook report. Although China's food production is expected to slow down over the next decade due to land, water and rural labor constraints, it can remain self-sufficient in major food crops.

OECD in presenting the joint report in Beijing, Secretary-General Angel Gurría said: "The outlook for global agriculture is relatively bright due to strong demand, expanding trade and high prices. However, this bright outlook is premised on a sustained economic recovery. If we fail to promote global economic development, investment and growth in agriculture will suffer, potentially compromising food security".

"The government needs to create an environment that promotes growth and trade," he added. "China has made great progress in expanding production and improving domestic food security. Agricultural reforms have played a key role in this process."

FAO Director-General José Graziano da Silva said: "High food prices are an incentive to increase production, and we need to do our best to ensure that poor farmers benefit from them. But we must not forget that 70 per cent of the world's food-insecure population lives in rural areas of developing countries, many of whom are themselves small-scale subsistence farmers."

he added: "China's agricultural production has achieved great success. Since 1978, agricultural production has increased nearly fivefold, and the country has made significant progress in food security. China is on track to achieve the first Millennium Development Goal of reducing hunger.

Although China's agricultural output has expanded and food security has improved, it is also necessary to pay attention to resource and environmental issues. The growth of livestock production will also face many challenges. We are very happy to work with China to find a viable and lasting solution."

developing countries will benefit

driven by population growth, higher incomes, urbanization and changes in dietary patterns, consumption of major agricultural products will increase, with the fastest growth in Eastern Europe and Central Asia, followed by Latin America and the rest of Asia.

With investment in agriculture in developing countries, the productivity gap with developed economies is narrowing, and the share of global production in developing countries will continue to increase. For example, developing countries are expected to account for 80 per cent of the growth in global meat production over the next decade, and trade volumes are expected to increase significantly. By 2022, developing countries will account for the majority of world exports of coarse grains, rice, oilseeds, vegetable oils, sugar, beef, poultry and fish.

To reap a share of these economic gains, governments need to invest in agriculture to encourage innovation, increase productivity and strengthen integration in global value chains, FAO and OECD stressed.

Agricultural policies need to address the inherent volatility of commodity markets by strengthening risk management instruments, while ensuring the sustainable use of land and water resources and reducing food loss and waste.

China's prospects

china's annual consumption growth is expected to outpace production growth by about 0.3 percent, indicating a widening but modest gap in the country's agricultural sector, the report said.

China's imports of oilseeds are expected to increase by 40% over the next decade, accounting for 59% of global trade.

The meat and dairy sector will continue to expand, leading to increased imports of feed grains. By 2022, China is expected to surpass the EU as the largest country in per capita pork consumption. China should maintain its leading role in the global aquaculture industry, which accounts for 63% of global production, and its position as the largest fishery exporter.

In the next decade, China's grain production growth is expected to slow down, but it is still expected to maintain self-sufficiency in major food crops. The report pointed out that the main uncertainties in China's agricultural prospects should be closely monitored and resolved. These uncertainties include the sustainability of high levels of economic growth, increased constraints on productive resources, land degradation and water consumption, and increased production volatility due to climate change.

According to FAO estimates, although the population has increased by 0.2 billion, the number of undernourished people has decreased by nearly 0.1 billion since 1990, and China's food security has improved. According to the report, it is estimated that 0.158 billion people in China are still undernourished, and ensuring food security for these people remains a major challenge.